The loonie closed at 100.88 cents U.S., up 0.22 of a cent in a shortened trading session that ended at noon ET.
Key U.S. lawmakers were predicting that much of their holiday season will be spent in Washington, D.C., as they seek to bridge a gap between the Republican-dominated House of Representatives and the White House.
A deal must be reached if the United States is to avoid going over the so-called fiscal cliff, which would involve the automatic imposition of hundreds of billions of dollars in spending cuts and tax increases that could plunge the world's largest economy back into recession.
President Barack Obama said Friday that he is "ready and willing" to get a big package done to deal with the fiscal cliff, adding there's no reason not to protect middle-class Americans from tax increases.
In commodities, March copper was down 2.1 cents at US$3.55 a pound while February gold bullion ended 60 cents lower at US$1,659.50 an ounce.
The January crude oil contract on the New York Mercantile Exchange slid five cents to US$88.61 a barrel.